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After reading about SEEDX on this forum I am considering adding it in my IRA. Has anyone else purchased shares in this mutual fund? It does appear that the past performance of both managers is above average and they're eating their own cooking.
Dear Swede: Good luck, the fund which will be one year old in a couple of week trails the S&P 500 Index buy 6.62%. putting it in the 91 percentile. The managers of this fund need to put the pedal to the metal if the fund is to survive. Regards, Ted
The managers of this fund used to work for Oakmark and Columbia funds, which have well established fund infrastructures and developed research capabilities. Now the managers are on their own, and time will tell if SEEDX turns out to be a great fund. But so far, it has a short and unremarkable track record, and I would not be an early buyer. I have found that it is often wiser to ignore the hype about a new fund that you will find on forums including the beloved MFO, and instead, just place the fund on a watch list and avoid the temptation to buy.
Somewhat bemused by this thread. A fund that has returned 20+% returns for the year may not survive? People base their decisions on how much cash a fund holds or doesn't?????
Don't people select funds to fit their investment philosophy/strategy? For example, if you are taking responsibility for the asset allocation and beta exposure in a buy and hold or tactical allocation portfolio then you just buy an index etf with complete exposure to each such asset. If you want to outsource some of that to a manager then you pick a manager/fund based on what you are looking for. Or anything in between and you evaluate the fund accordingly.
If you are looking for the manager to reduce volatility at the expense of some returns, you buy a fund that either fully allocates amongst multiple asset classes and manages that allocation to control volatility or allocates between an asset class and cash as the manager sees fit to reduce drawdowns. If the manager held more cash to moderate volatility depending on market conditions, that is what you bought the fund for.
If you didn't buy this fund because it was 6% below the index and not happy with a 20%+ return in a year, then a fund that was close to the index or beat it is likely to drop much more when there is a correction or a down market. That is fine if that is what you wanted a fund to do. But then these two choices are apples and oranges fit for different portfolios and investing philosophies. Buying a fund because it was in a 99% percentile is some year is just performance chasing that is bound to disappoint.
I really don't know how people make their fund decisions and so confused by comments here.
What do people look for in a managed fund and are the expectations realistic?
It's misleading to claim SEEDX is 6+% behind the S&P YTD as has been pointed out numerous times by numerous posters and the MFO profile. Ignoring the fund's first day when the index was up over 2.5% and SEEDX's NAV didn't move because it wasn't invested, the fund is up ~ 21% and the index ~ 24%. At various times during the year it's been ahead of the index and has beaten the index in 4 of 8 three month rolling return periods. It's done this holding large amounts of cash in what has been seen as a fully valued bull market.
MFO profiles new funds it finds interesting. Often it does this by comparing a manager's history with the stated objectives of the new fund. With SEEDX, Prof. Snowball noted the fund managers' previous value opportunism with their eye for safety. One year is far too short a time to judge any fund, but it seems like SEEDX has behaved exactly as predicted given the current market environment. As you point out, it's entirely up to individual investors to then determine whether or not any fund profiled here fits their style, goals and asset allocation, which surely aren't the same as other's.
The 21% cash figure is from 9/30 of this year so I would wonder if that has come down any since then. The managers I suspect are being cautious in buying since the market has had a good run up here. I would consider that a good thing. I do not have any money with this fund but in the past I have put money into new funds that have also had high cash positions at first as they got started. I was looking at the long term rather than the first year.
this fund should be bought. but not right now. this fund needs to be tested in a down market. joke is you then buy whether it passes or fails. THEN you cannot go wrong, just like with pretty much any fund bought after a bear market
SEEDX is classified as a large blend fund. Have you looked at all the large blend funds that have 30%+ gains in 2013??? Why would you want a laggard such as SEEDX? New funds tend to outperform their first year (the new fund effect) and the fact this hasn't should be ample warning to stay away. SEEDX has all the makings of a groupthink fund ala ARIVX, PRPFX (the ultimate groupthink fund) and AQRNX to name just a few.
I bought some SEEDX, so I guess I'm allowed to make a few observations. Most large company funds don't outperform their index, so my main hope is gnerally that they will do better in a down market. If the managers have all their investable millions in the fund, capital preservation should be a major goal, so you might want to tag along. If you want to make your own millions, this might not be as aggressive (risky) as you want. They do have a 12b 1 fee, so they aren't above dinging you extra for the ride. Since they can short stocks or indexes and aren't constrained to one market or company size, it could get interesting later, which was the main reason I gambled a few sheckels. OTOH, they are in Park City, aren't they? My gestalt is that that's not a place with a nose-to-the-grindstone ambiance. Must admit, I haven't put in any more money after the initial entry. And since I haven't sold ARIVX, most people here would tell you to ignore all of the above.
Many mutual funds that people purchase are "groupthink" funds. I know that many of my own investing ideas came from reading different forums and spotting investments that fit my risk tolerance. In fact, my biggest positions are from a fund shops that I would have never heard of if it wasn't for forums such as this...Matthews, Artisan, etc.
I believe SEEDX will fit nicely with FPACX, ARTGX, ARTWX, and MAPIX
Reply to @Swede: You got me there. Not all groupthink funds are dogs, laggards and lemming funds. Matthews and Artisan are super fund families and what's not to like about FPACX. But about that ARIVX.....
I prefer to uncover my own funds via my own research and ignoring what the talking heads are saying no matter how articulate, persuasive, and intelligent they may be. We should all strive to become our own expert. And I always set an adjustable exit point based on lack of performance as soon as I purchase. But then I always danced to the beat of a different drummer anyway. Good luck with SEEDX. At least it hasn't languished this year with single digit or negative returns like some of its groupthink brethens.
Junkster: I really don't know what to say in regards to ARIVX. In Eric's defense, many managers have said that the small cap space is/was greatly overvalued for some time. It should also be said that many small companies are without global exposure and are barely staying in the black. This reality has hit me personally.
Reply to @cman: While I don't necessarily agree with Ted on this, I can easily defend his point regarding cash: Ted is the manager of his investments. He will determine what he regards to be his overall cash position. If he buys a fund, it isn't because of the cash that they may or may not hold: he buys a fund to obtain a particular positioning in a specific financial area.
Seems like a valid perspective to me, if that's how you want to run things.
I'm curious: Are there many actively managed funds that don't get to 5% cash from time to time? Even something like GPROX is at 8% cash at last reading, and I can't think of any actively managed fund that I've looked at which didn't get to 5% cash somewhere along the line. ARTGX is over 11% now, TWEBX about the same, the FPA funds are all way above it. Perhaps this is common with growth funds? My own investing philosophy keeps me away from the high flyers of the investing world.
Reply to @Old_Joe: Certainly. As pointed out in the different cases in my post. Point is that the evaluation of a fund for a portfolio depends on the philosophy/strategy rather than absolutes such as too much cash level. Without that context, the statement could be absolutely correct or plain wrong.
Just surprised that in this day and age and in a forum full of above average investors, people are discussing a fund in isolation of their portfolio need/philosophy with absolutes of cash position or one year performance or what percentile that fund might be to recommend/diss.
Even buying the latest hottest fund might be legit if your strategy is momentum trading but not if you are a long term buy and hold.
Are people still buying mutual funds like most buy artwork for their homes? I got that because it was on a sale, that one was recommended by my friend, that one was appreciating in value, I liked the color on that one. Soon, the house looks like crap.
Investment portfolios would look the same soon, wouldn't they?
Perhaps their problem is not just 20% in cash, but also 3.5% investment in RWM, which is ProShares Short Russell2000 ETF. This fund behaved horribly, so the bet against small cap stocks made by SEDEX did not paid off well. Eventually when small caps crash, shorting them will be an advantage, but this did not happen yet.
Comments
Regards,
Ted
Regards,
Ted
The managers of this fund used to work for Oakmark and Columbia funds, which have well established fund infrastructures and developed research capabilities. Now the managers are on their own, and time will tell if SEEDX turns out to be a great fund. But so far, it has a short and unremarkable track record, and I would not be an early buyer. I have found that it is often wiser to ignore the hype about a new fund that you will find on forums including the beloved MFO, and instead, just place the fund on a watch list and avoid the temptation to buy.
Kevin
Regards,
Ted
@Swede...might take a minute to read an earlier discussion on the board:
http://www.mutualfundobserver.com/discussions-3/#/discussion/comment/31679
Don't people select funds to fit their investment philosophy/strategy? For example, if you are taking responsibility for the asset allocation and beta exposure in a buy and hold or tactical allocation portfolio then you just buy an index etf with complete exposure to each such asset. If you want to outsource some of that to a manager then you pick a manager/fund based on what you are looking for. Or anything in between and you evaluate the fund accordingly.
If you are looking for the manager to reduce volatility at the expense of some returns, you buy a fund that either fully allocates amongst multiple asset classes and manages that allocation to control volatility or allocates between an asset class and cash as the manager sees fit to reduce drawdowns. If the manager held more cash to moderate volatility depending on market conditions, that is what you bought the fund for.
If you didn't buy this fund because it was 6% below the index and not happy with a 20%+ return in a year, then a fund that was close to the index or beat it is likely to drop much more when there is a correction or a down market. That is fine if that is what you wanted a fund to do. But then these two choices are apples and oranges fit for different portfolios and investing philosophies. Buying a fund because it was in a 99% percentile is some year is just performance chasing that is bound to disappoint.
I really don't know how people make their fund decisions and so confused by comments here.
What do people look for in a managed fund and are the expectations realistic?
It's misleading to claim SEEDX is 6+% behind the S&P YTD as has been pointed out numerous times by numerous posters and the MFO profile. Ignoring the fund's first day when the index was up over 2.5% and SEEDX's NAV didn't move because it wasn't invested, the fund is up ~ 21% and the index ~ 24%. At various times during the year it's been ahead of the index and has beaten the index in 4 of 8 three month rolling return periods. It's done this holding large amounts of cash in what has been seen as a fully valued bull market.
MFO profiles new funds it finds interesting. Often it does this by comparing a manager's history with the stated objectives of the new fund. With SEEDX, Prof. Snowball noted the fund managers' previous value opportunism with their eye for safety. One year is far too short a time to judge any fund, but it seems like SEEDX has behaved exactly as predicted given the current market environment. As you point out, it's entirely up to individual investors to then determine whether or not any fund profiled here fits their style, goals and asset allocation, which surely aren't the same as other's.
Most large company funds don't outperform their index, so my main hope is gnerally that they will do better in a down market. If the managers have all their investable millions in the fund, capital preservation should be a major goal, so you might want to tag along. If you want to make your own millions, this might not be as aggressive (risky) as you want. They do have a 12b 1 fee, so they aren't above dinging you extra for the ride.
Since they can short stocks or indexes and aren't constrained to one market or company size, it could get interesting later, which was the main reason I gambled a few sheckels. OTOH, they are in Park City, aren't they? My gestalt is that that's not a place with a nose-to-the-grindstone ambiance.
Must admit, I haven't put in any more money after the initial entry.
And since I haven't sold ARIVX, most people here would tell you to ignore all of the above.
I believe SEEDX will fit nicely with FPACX, ARTGX, ARTWX, and MAPIX
I prefer to uncover my own funds via my own research and ignoring what the talking heads are saying no matter how articulate, persuasive, and intelligent they may be. We should all strive to become our own expert. And I always set an adjustable exit point based on lack of performance as soon as I purchase. But then I always danced to the beat of a different drummer anyway. Good luck with SEEDX. At least it hasn't languished this year with single digit or negative returns like some of its groupthink brethens.
Seems like a valid perspective to me, if that's how you want to run things.
Just surprised that in this day and age and in a forum full of above average investors, people are discussing a fund in isolation of their portfolio need/philosophy with absolutes of cash position or one year performance or what percentile that fund might be to recommend/diss.
Even buying the latest hottest fund might be legit if your strategy is momentum trading but not if you are a long term buy and hold.
Are people still buying mutual funds like most buy artwork for their homes? I got that because it was on a sale, that one was recommended by my friend, that one was appreciating in value, I liked the color on that one. Soon, the house looks like crap.
Investment portfolios would look the same soon, wouldn't they?